Interest Rate in Brazil
Brazil - Interest Rate
Central Bank unexpectedly holds the SELIC rate at 6.50%
At its 16 May meeting, the Central Bank of Brazil’s Monetary Policy Committee (Comité de Politica Monetaria, COPOM) decided to keep the benchmark SELIC interest rate at its record low of 6.50%. The committee’s decision surprised market analysts, who had expected a 25-basis point cut, and paused the easing cycle that began at the end of 2016.
The Central Bank’s decision was motivated by its view that upside risks to inflation have intensified since its previous meeting, largely due to the depreciation of the real and continued capital flight from EM countries as the U.S. raises interest rates. Outside of exchange rate developments, inflation dynamics in Brazil remain favorable. In the accompanying press release, the Bank adjusted its forecasts for inflation, penciling in year-end inflation of around 3.5% in 2018 (March report: 3.8%), assuming the SELIC rate ends the year at 6.50% and the exchange rate ends the year at USD 3.11.
The Bank’s forward guidance was clear. In it, the Bank stated that additional monetary easing was no longer necessary and it intends in the next meetings to maintain the SELIC interest rate at the current level.
Brazil Interest Rate Forecast
Met the why particular Consensus Forecast participants are still taking the latest developments into account. Last month, they saw the SELIC rate closing 2018 at 6.33% and 2019 at 7.87%.
Brazil - Interest Rate Data
|Policy Interest Rate (%)||11.00||11.75||14.25||13.75||-|
5 years of economic forecasts for more than 30 economic indicators.
Brazil Interest Rate Chart
Source: Central Bank of Brazil.
|Bond Yield||11.42||-0.82 %||May 21|
|Exchange Rate||3.68||-0.13 %||May 21|
|Stock Market||81,815||-0.11 %||May 21|
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May 23, 2018
The consumer confidence index published by the Getulio Vargas Foundation (FGV, Fundaçao Getúlio Vargas) fell a seasonally-adjusted 2.8% from the previous month in May, decreasing from 89.4 in April to 86.9, the worst print in seven months.
May 16, 2018
At its 16 May meeting, the Central Bank of Brazil’s Monetary Policy Committee (Comité de Politica Monetaria, COPOM) decided to keep the benchmark SELIC interest rate at its record low of 6.50%.
May 16, 2018
In March, economic activity fell 0.7% from the previous month in seasonally-adjusted terms, according to the Central Bank’s monthly indicator for economic activity (IBC-Br, Indice de Atividade Economica do Banco Central).
May 11, 2018
Retail sales (excluding cars and construction) rose a moderate 0.3% from the previous month in seasonally-adjusted terms in March, which contrasted February’s 0.2% decrease.
May 11, 2018
Consumer prices in April rose 0.22% over the previous month, above March’s 0.09% rise.